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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

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03:00:57

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Us 26, Chicago 12, New York 11, U.s. 11, America 11, Apple 10, Washington 9, Chevron 9, Bny Mellon 8, S&p 7, Ford 7, Phil 7, Tesla 7, Bob 7, Rick Santelli 7, California 6, Cms 6, Ho 6, Europe 6, Bob Pisani 5,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    November 1, 2013
    9:00 - 12:00pm EDT  

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mobile tv, et cetera, applications, another leg of growth. >> you don't get concerned about the battle where they go up against the network, try not to pay some of the -- >> it's certainly a battle and the issue, i think they win it. >> bob, thanks for being here. great having you. >> that does it for us. have a great weekend, everybody. right now it's time for "squawk on the street". >> good friday morning. welcome to "squawk on the street." i'm carl quintanilla, jim cramer, david faber and kelly evans. >> after two straight months of gains for stocks, a big jump. the 10-year yield, some of the fed anxiety pushing gold down to two-week lows today, going for its first weekly drop in three.
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orroad m our road map begins with a 4.5% gain for the s&p. >> the ipad air hits apple stores around the globe today and the lines have already formed. but but we have one on set right now. >> lower refining margins again. >> and thinking outside the box, the container store makes its nyse debut today. >> we'll talk about the ipo coming our way. >> score one for the bulls in october. the dow and s&p hitting record highs, dow up 2.75%, the s&p rose nearly 4.5%, nasdaq up nearly 4% as well. we know about october. the first trading day of the month this year has traded negative only twice in april and may and we all remember the very first trading day of the year, that 300 plus point gain for the dow, jim. >> it seems like the old days
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when we used to call it mutual fund monday we used to have and at the beginning of each month there would be contributions for 401 ks. is it continuing? is it back to that? i still don't see a lot of individuals who embrace the market. that's empirically too difficult to refute. >> which old days are you talking about, though? everybody wants to start talking bubblicious here. it doesn't compare to the old days of '97, '98, '99. >> people don't remember what it was like. we would come in and the stock was up 30 and there was no reason. >> think about what the economy was doing in 1999. the u.s. was coming off a period where we had reasonably strong economic growth, the unemployment rate was probably below 5%. it's not necessarily the behavior of the market necessarily, even though there are signs of consistency, it's more the fact we've still got the unemployment rate up above
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7% and there's a sense the economy is just not clicking. >> i think it's poetic, that the money section in "usa today" "is the fed inflating a stock bubble," just as we're finally getting to a tapering -- did you hear plosser today? >> saying he wants to cap the signs of the balance sheet. >> he wants a number on the balance sheet. we're back to that. >> well, look, i don't know. i know too many people who own stocks and they're actually happy that they made money. i can't begrudge them. it's been a great time. the fed wanted the wealth effect to come up. all i can say is what has congress done to help the economy. what has the president done? they can't even build a bridge these guys. >> that's why the fed's the only game in town. >> the fed piled on in '37. this is not that time. bernanke sees what's going on in washington. he knows they're destroying any
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sort of hope for incompetence so he has to provide it. all kreuger had a great piece. i thought it was an exceptional piece. congress itself is not doing anything to create jobs so who is supposed to do it? >> the private sector is typically the answer. the question is are we in one of those periods? where there's enough of a gap still in where the economy needs to be going and that there needs to be some stimulus to get us there. >> this is all that commoditization nonsense. the international companies -- they've got a little bit better multiple. most tech stocks i cover are trading at historically low multiple. >> energy is starting to turn their way and only four times since 1990 has the final quarter of the year been negative. >> especially i think when you've been up this much, you
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really have a remarkable quarter. can we please stipulate when you talk about the market, all you're doing is falling prey to what a lot of the gray beards want you to do is presume there is no differentiation. jpmorgan historically would be at 60 if we had any sort of normalized money, normalized period. is that expensive? you ask these guys and you say jpmorgan, i'm not talking about jpmorgan. i'm not talking about intel. i'm talking about the market. i can't talk about the market. >> ge is trading at an 18 multiple, 19 multiple right now. it's 45 times earnings. remember that? >> ge, and that was regarded as cheap because there were a lot of companies like intel that were trading at twice that. >> rates obviously were higher. >> rates at 3.5. clorox goes to 80.
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so clorox is really overvalued. when you take rates to 2.9, kimberly clark goes to 92, really dangerous. where was industrial production five years ago? we just got back to it. >> and it's been lagging. >> although it's interesting, keep an eye on ism at 10:00 today. there has been a gap between chicago and what the actual production figures are. it's not quite as strong as the headlines would have you believe. as you say, we certainly have come back. >> at the same time, we have a changed economy. i've been watching mexico. we had harmon on last night. the company was up 15%. they're moving a lot of their business to mexico. i think that most of the time when you see these companies and they change their cost structure, then their earnings go up and you got to give it a higher -- >> one question on bubbles. i made a list on twitter of a
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people who have made a bubble or undeserved multiple. elon musk, shiller, bill gross, the list is getting longer. >> but they're all big thinkers who don't want to look at -- well, no, the shillers of the world, they don't want to differentiate among stocks. i feel like that's getting your hands dirty. okay, guys, is wells fargo really expensive? maybe versus citi. but we're stuck within the confines of individual stocks and among those, yes, tesla is very expensive but tesla is trading at a multiple to edmonds, as a multiple to the 3a. but a lot of stocks are not. we do have some outliers. amazon is incredibly expensive. harmon, up more than 10% yesterday is selling at more than 14 times earnings. how is that expensive? >> and you can back check this against the broader financial markets and say is it that stocks are expensive or that valuations are generally looking
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frothy. look at what's happened with debt spreads. look at the junk bond yields relative to some of the -- that's where you want the whole picture really. >> i don't disagree with that. remember, we have huge companies, they fired a lot of people, they got free trade going on that makes it so the earnings can go up. the currency is going to go their way. ppg is not that expensive but it just doesn't count in these big think guys. it's not his job. i regard it as my job to talk about whether aig is as bad as i think it is. >> and you do that job well. >> thank you very much. >> you're very welcome. let's move on to a stock that is considered to have a pe multiple that's fairly low. apple rolling out its ipad air, now available in retail stores around the globe. this is the first time china and japan have been included in the first day retail launch of an ipad model. carl is going to model one for you right now. >> i'm going to hand you both at the same time.
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see if you can tell which one is the 2 and which one is the air. here we go. >> in is the air. >> nice, very nice. >> close your eyes. we're going to do a little shell game. >> this is the air. >> there you go. >> we're not here to show for apple, but the retina display, if you look at what mossberg said in his review, he was not kidding around. >> icahn, 525 bid, that's the one i want to own. who is trotsky, russian prune juice. >> it's going to go on sale today in the u.s. we'll do our normal thing about looking at lines. gene munster will have the channel checks. >> munster says hugh about rich greenfield, facebook. much better than expected. people say everything. i talked to a taiwan manufacturer of screws for this and then i met with the alcoa
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people that make this and i have no conclusions whatsoever. >> none at all? >> can i see that again, please? >> no conclusions. >> obviously, you have to work on your channel -- >> remember, this is an alcoa skin. and steve jobs loved the feel of aluminum versus plastic. and if you try to get an answer from alcoa about how well things are, they're going to tell you you're going to have to wait a long time. alcoa can wait. >> yes, yes. i'm a mini fan, by the way. >> you are? >> yeah. >> that means your wife doesn't like what you watch. >> no, it's just easy to carry with you and take with you and much lighter than this and basically does the same things. in terms of the stock and impact and this coming out and mossberg's incredibly positive review -- >> i think it does matter. but that's the problem with the analysts. the analysts think it's gross margins. my suggestion is when you have a superior product, you will see gross margins go up because
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competitors can't compete. and craig jelinik at costco, he said this is the product, for christmas, this is the product. and ups has done well and percolating when apple has a new product that people buy. >> said on a day that the holiday season does begin. it's a little regis. a little monochrome atic. >> in is an italian made costco tie. it's one tenth of what i usually pay for my ties and it wipes off the ketchup as good as ever. >> jim bullard saying labor market progress in 2012 provides the most powerful case for tapering.
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unemployment and non-farm payroll gains have shown true improvement in the past year. he says not all job indicators have shown that improvement. the fomc wants reassurance. i bring this to you two days after the fed met, decided to keep its interest rate and qe policy in place. you have a kind of dovish guy who is talking a little bit about tapering and talking about labor market improvement making that case. and if there are any questions about how jim bullard thinks, we had him on for two hours on "squawk box." back to you. >> really quickly, steve, is bullard the swing vote, so to speak? is he the justice kennedy of the fomc? >> i think that's a good way to put it. he has been hawkish in the past. right now he is dovish along with the minneapolis fed president. i'd put those two in the middle. there's kind of two justice kennedys on the fomc right now. >> good context. steve liesman at hq.
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>> time to seal it up. the container store making its wall street debut, ticker will be tcs. we're told they're bringing a hundred employees to the floor. it's going to get low. and kipp tindell coming up. a lot more "squawk on the street" in just a moment. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. to tostore and essentially they just get sold something. we provide the exact individualization that your body needs. before you invest in a mattress,
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tjx sales doing great job. raw stores. what do these stores have in common? >> cheap. private label. kirkland. >> boy, kirkland is so good. >> people are spending more on their tablet, their devices. >> they're willing to do that. >> than they are on their sweaters. i think there was a terrific article today in the financial times talking about how the ex-microsoft ought to urge to spin off xbox unit. this is by paul allen. people like hard goods. they think there's a value in hard goods. that's why home depot is up where it is. >> this will be an interesting story. they train their workers extraordinarily well, pay their workers extraordinarily well by industry standards. >> and we got to remember whenever we have these
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situations, it's reminiscent because you did the great special on costco, they pay them high and train the costs so low. this is the old goldman thing. we used to do this thing called retention, where we realized if no one ever leaves, it saves you a fortune in training. bucknell taught me that. if you have these workers and they do not turn over, you save a for tune tune in training ande like shopping there. >> the nations second largest oil company was hurt by refining margins and there's a report that tesla is outselling bmw, mercedes and lexus in some of america's wealthiest communities. the model s is the most registered car in eight of the nation's 25 most expensive zip codes. >> that's incredible, isn't it? >> and this morning they come out and say they're gaining
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significant traction in europe. once again, a colt rose bigger in is a stock where people who test drive buy. they don't necessarily buy the tesla, they buy the stock. >> why do we get yawns when exxon mobil and chevron report, two of the most profitable companies in the world? >> did we wake you? >> what was that? chevron? >> chevron. >> chevron is a company that is a great american company that has very little growth. what do i do? recommend that over tesla, which has super growth? the anti-bubble crowd -- here's a great experience. chevron is right in the anti-bubble crowd. they have a division refining. let's go right back to the "financial times." refining overcapacity hits shell and exxon mobil. can i add chevron to that list?
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yes. why did they wisely spin it off? they're mad as hell and they won't take it anymore. >> shell oil predicted the last gasoline car would be built in 2070. >> i thought it was 2069. are you sure? >> yup. >> that was not a good quarter. >> from shell. >> from shell. we have cars that don't use as much gasoline. we have natural gas that if you listen to the conference call, people are a little more excited about it. diesel is 25% of our oil in this country goes to making diesel. thank you boone pickens for teaching us that. if you switch that to natural gas, we would take our ships out of the straits and have cleaner skies and no one really cares.
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see southwest energy. >> well, one day they'll listen in washington and they'll say, boy, he has no idea what he's talking about. >> when we come back, cramer will help your portfolio get off to a flying start this month. next, one more look at futures as we kick off the beginning of november. i think with a little morrissey here. a lot more "squawk on the street" from the nyse straight ahead. hmm. ♪ mm-hmm. [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now -- but hurry, the offer ends soon. [ santa ] ho, ho, ho! [ male announcer ] lease the 2014 ml350 for $599 a month at your local mercedes-benz dealer.
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it's friday. amazing how quickly that weeks goes by. >> we'll go to sony. everyone wants out of sony. can we look to loeb for help here? >> he bought them in japan. it's about a 6.9, 7% stake. we'll see what happens. but i would expect he's not done yet and now he's more or less flat on his investments. >> the parts are worth so much more than the whole. i remember the great michael price telling me that, look at all these different divisions. what is our phrase here when you get smaller to get bigger? >> shrink to grow. >> shrink to grow. >> we'll see. that fight far from over. >> listen people who think bubble, bubble, bubble. this is the shares that are owed
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that a japanese company had of theirs. this deal is 67, the stock is already at 68.64. it sells at eight times earnings. so is that expensive? is eight times earnings expensive david? >> given the risk in this business? come on. has that ever supported a particularly high multiple? >> no, it's always supported a single multiple. there hasn't been a lot of new capacity added on. this stock would sell at a 14 multiple if we're really in a bubble. that means individual stocks are bubbles. solar city is a bubble. going up big off of first solar. so i'm just -- i'm just saying that you have to go case by case. some industries have not gotten inflated at all. >> if it's involved with elon musk, it's a bubble.
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>> it's a bubble. he's a bubble boy. that's a reference to "seinfeld." my kids want solar panels on my house. it's like, dad, go to solar city. like circuit city. >> circuit city, remember that one? >> goldman sachs raised its price target today. david, get on board. >> i just like saying it, bubble best buy. kleinfeld, everybody? yes, it is friday and i'm getting a little giddy here, aren't i? "squawk on the street" coming right back after this.
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or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you're watching cnbc "squawk on the street." the opening bell set to ring in a little less than a minute. busy store this morning as t container store gets set to ring the bell and go public. >> this is a company that's beloved with a terrific board and will be an exciting stock that will go at a nice premium. >> very nice. already had to raise the range as we pointed out this morning. ticker will be tcs. let's get a look at the opening bell, the s&p at the top of your
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screen. as we said by now, at the big board celebrating its ipo. we'll talk to the company's ceo in just a few moments. over at the nasdaq, shutter fly, an online digital photo retailer. >> goes a long way, enthusiasm. yes, it does. i guess you're willing to just say this is part of the whole bubble process. >> it does point to sort of a larger issue as we get into retail. we're going to talk a lot about it over the next six weeks or so. differentiation, specialty, trying to be all things to all people has not worked lately. >> no, it hasn't. that's a great point. if you offer value or a unique niche, it can work, too. whole foods is going to report next week. no one thinks whole foods offers
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value. it offers a unique niche. i like the fact they give it the good housekeeping seal of approval. i'll give anything for that. >> we are getting numbers on auto sales. chrysler already came out with a miss. phil lebeau has ford numbers. >> reporter: these are slightly below the estimate, overall ford for the month of october, an increase of sales of 14%. again, the street was expecting 15.5%. a couple of numbers stand out here. the best retail sales for the month of october since 2004. we usually don't focus on just one month. that is interesting. best retail sales since 2004. the f-series, it continues to be just incredible. up 63,000 in terms of total sales, up 13% for the month. that is the sixth straight month with f-series sales of greater than 60,000. guys back to you. >> phil, thank you for that.
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>> the stock does anything. >> i was going to ask you, you know, we've seen some of the whole sale inventory numbers showing stockpiling at auto dealers. some of the loans are stretched out. >> gm stories there about no deals, deals, i think if you don't offer these deals, you got to stay on that treadmill. these stocks have stalled. i don't know why. i'm saying that it's not as easy because europe is turning so you would think ford and gm would be doing a little better. is al mulally going to leave ford? is that the issue? >> it keeps coming up. >> the microsoft ceo job is certainly one of the bigger stories we're following and i continue to talk to people about it. it's early. we don't know. but that name just won't go away. >> it won't go away. >> and number two, again, my travel -- i'm kind of flummoxed by it. >> certainly in the states, the
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war between gm and ford continues on the pick up side. phil mentioned the f series, gm is trying to push those si silverados. >> it's big money to the f series. >> with ford, i'm very, very upset with aig. >> i'm sorry, with what? >> aig. revenues weren't there. they did not deliver a good quarter. they just didn't. >> we've not mentioned -- aig is going to be the biggest lagger on the s&p, at least at the open. netflix did get an uptick from bard. >> it's subscribers per share. these cult stocks, they always have a metric that we -- number of transactions per share. >> there's always a way to come up with something that looks cheap. >> that's the sign of a bubble,
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when you can come up with something. this is what we remember from the 90s. it's eyeball, david. get with the program. >> profitability matters not. it's only about growth in the market, measured by -- >> how about the fact that people like it. isn't that enough? >> it's enough. >> come on, david! >> bard, by the way, does go into whether or not a set top box deal is in the offing. they say maybe not. but it should be offset by original expansion, even though the cost might be creeping up in terms of production. >> we keep mentioning bubbles and we're doing it in sort of -- >> it's a theme. >> i know. you don't necessarily think netflix is a bubble. >> i like to look at market capitalization. i think the opportunity is worth much more than the market capitalization, 20 billion. that idea they could own the world, own the living room, companies would kill for that. amazon is just a great executeor. but i think the opportunity for
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netflix allows for the market cap to get higher and that's what i think has happened. >> and you had harmon on. >> bob olstein was saying this is a company where they're going to be doing double digits in every one of their enterprises. they do infotainment, this is a remarkably run company that gets very little credit. >> you gave them a platform last night. two days in a row. >> does a great job. there's a harmon factory near where i have a house in mexico. you move there because it's got a great workforce and it's very inexpensive. it's an inexpensive place to
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make quality goods. you're a free trader, i'm not. >> you're not? >> no. i'm tired of it. i'm a fair trader. >> you can't get tired of free trade. >> i just think that we lost a lot of jobs to mexico. hey, we did! we lost a lot of jobs to china. they pollute the world, we have tight pollution controls. doesn't seem fair to me. >> okay. facebook shares are up about 2.2% today, rebounding after yesterday's selloff, i guess we could call it. >> right. >> wasn't that dramatic. there was that dramatic turn around after hours on wednesday. >> facebook had the great growth. >> upgraded today. >> citi gives you a path to 70. it was the greatest growth of any quarter i believe of a major company in this earnings season and that should matter. and there's growth guys who want to own it. and i think that it is just again, there's a cohort of
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people who keep getting money in who is outperformed the market. those are the growth stock guys. they're in biogen, they're in facebook. they go buy these stocks as they're looking at total addressable market, looking at 2017 earnings. it's ludicrous but that's how people view these things. >> visa's up, mastercard is up. >> go over that call! they gave you a clear growth path. they talked about a lot of good things in the pipe. that stock is inexpensive. that stock should be bought. >> defense contractors having a nice day. northrop on the docket on the top of the list for the most part. >> they've executed and executed. if they'd only given lockheed martin that for the web site. >> nafta is not all good.
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we have to have cleaner skies, take our jobs away. >> i understand but you can't close off our markets. you can't do that. >> i think it's just wrong to say we can open our doors to everybody when the chinese are not playing fair. >> nafta has added a lot of jobs as well. >> we'll check in with pisani at post eight as we await the container store. gold, first weekly loss in three as people begin to think that qe is at a march taper, a december taper? >> barrett did this gigantic deal to raise a lot of capital. you would think given how hard it is to get gold out of the ground these days that there would be some scarcity factor. that currency is not worth -- people, it's a currency goal. the euro has regained luster. we don't talk about it enough. all these banks are starting to do recaps. royal bank going to do a good
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bank/bad bank. i just think that the euro is something to watch again as europe seems to be a little more -- >> yes. >> criticize their germany's export policies. let's get to bob pisani, who is awfully close to post eight. >> i don't know if you heard that cry that just went up a few moments ago. they boosted at the 28 to 32. 12.5 million to 18, the price stock was 17 to 18, we're looking at $28 to 32. tcs was bought by leonard green in 2007. they're talking about expanding to 300 stores. they've only got of63 right now. talk five went public a little over a year ago. they've had a huge run since then. they have been aggressively expanded. restoration hardware went public a year ago in november. they've been expanding
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aggressively. that stock is up almost 200%. not an ipo, i want to welcome east m eastman kodak. as an old guy with a dark room, it warms my heart to see them. nice to see them back. yields have been moving up the last two days, move up this morning, we made some news this morning, plosser was on the air from philly fed, making hawkish comments, that moved interest rates up, we've gone from 2.48 to 2.58 in the last days since the fed meeting. the concern is the tape sr is n off the table. expectations are 55. interest rates are going to move up again on that. by the way, speaking of ism, it's been held by the oil and natural gas we've been receiving recently. by the way, they just raised it to 30 to 34 on the container corp now. oil and gas really help in the manufacturing business.
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did you see fluora this morning, they raised guidance talking about all the business they're getting from the oil and gas industry. there's your fracking premium you're getting. chevron here short of expectations. i know the refining margins have been the issue but they're still having the same problems as exxon and other big oil companies. they have higher cost, number one, number two, declining production and, three, they can't boost production fast enough. they've invested a lot of money, chevron. that's certainly a good sign. but the bottom line is very, very simple here. not a single big oil company is outperforming the s&p 500 but all of the independent oil and gas producers are dramatically outperforming the s&p 500. i put up pioneer natural resources but everybody in the shale and equipment end of the business, the halliburtons and
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slumbchlumberger schlumbergers. right now 30 to 34 on the container store. back to you. >> we'll be checking in again i have a feeling, bob. let's go to the bond pits and check in with rick santelli. rick? >> thank you. we finished the end of last month on a 10-year at 2.61, we're hovering at 2.58. maybe the most important issue is that technicians really nailed it. at 10:40 today, i'll tell you why they nailed the low yield at 2.47 the day before yesterday. we can talk about all the reasons and tapers and blah, blah, blahs but the real issue down here is who really is going to control the market and how quickly it flexes its muscles. look at the two-day chart of 10s. you can see where yields are going. if you open the chart up in mid
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june, it's hard to predict how long it will stay above and what momentum it will build. the quote, unquote, risk-free area of the yield curves and fixed income market, let's look at some etfs. if you look at the lqd, you can clearly see all the risks are about the same, they're turning and that makes sense. let's switch gears. let's look at the dollar. if you look at the dollar index, it's just stellar. it's about a quarter of a cent over 80, it closed over a quarter of a cent over 79 last week. if you open the chart up here today, you can clearly see on this one, the move is rather substantial. look at the other side, the euro. the euro is above 138 last week. open that chart up. we are hovering at two-year highs against the dollar. now we're below 136. with the ecb meeting thursday, this is going to be a wild ride. back to you at post 9. >> thank you very much, rick
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santelli. >> shares of vodafone yesterday up rather sharply on report that at&t is preparing to potentially buy vodafone at some point down the road. i guess they moved up that container store pricing again. wow. >> i'm listening. >> all right, good. it hasn't opened yet. you know, in terms of that, frankly, interesting that it moved up as much as it did because many people who are shareholders of vodafone already given the comments that have come out of at&t over some time and things that anybody in telecom has been picking up of late would not be terribly surprised were at&t to try and mount an effort to buy vodafone, once and only when its deal with verizon closes. ta this is in europe, an ft-sponsored speech he gave.
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i think the motivations, he goes on to say, for the european union itself are too dramatic. i look at this and i see a lot of up side and potential for europe. it is interesting to note of course europe itself was so far ahead. 10, 15 years ago europe was far ahead when it came to wireless technology in this country. they completely lost sleep many would say because of the european union, because of regulation, because of commoditization. whether or not at&t moves in there continues to be an open question. we will see. of course vodafone, it's not as if it doesn't have potential options it might want to pursue. doesn't forget liberty mobile is out there, too. perhaps they go like this, perhaps they go like that. one never knows. the wall street journal today
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pointing out perhaps the more important story, which is the nsa problem that we have. >> i think it's for real. >> how will that impact if -- >> are we the chinese? >> yes. >> you think about wallway and its inability to operate here and we might be treated the same way. >> i think we might be. i think we went rogue on this stuff. >> that may be the more interesting story. >> i totally agree with that. i think that's a huge story for us. >> the ipo buzz continues to build this morning as we wait for container store to open for trade. latest indication, 35 to 39. after that, the company's chairman and ceo kip tindell will join us here at post 9. and ism is on the way in about 15 minutes. did not go away. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading.
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our focus is on post 8.
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let's get "six in 60" with jim. vertex is first. >> i want to be careful on all the big biotechs. i would even take some off the table of gilead. >> interesting. chart industries. >> they had a disappointing quarter. sam thomas very good guy but the shortfall is meaningful. >> a secondary at yelp. >> i point out that at western digital, yelp did stop at 67. quarter was good. don't believe the critics. >> avon? >> it's a disaster. >> and quinntiles. >> the up grade is moving the stock. i think it's right. >> and groupon is getting attention here. >> i think groupon is making a major comeback with that new management. i would not bet against it, i would bet with it. >> what's on "mad money"
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tonight? >> an analyst yesterday said sell first solar. i said by first solar. i try to give one or two stocks of the week now. you got to be there. >> i got to tell you, dalton, i am through with you. i am through with you. you wrecked my whole halloween and i came as dead mouse, too. i was dead mouse. with a 5 instead of an s? >> yes, that was very nice. >> you want to stick around? we think we can time this right where the container store will start to trade when we return from commercial. don't go away. (vo) you are a business pro. maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect.
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container stores just opened for trade. bob pisani. >> congratulations. everybody is doing high fives here. priced at 18. opens at 35. insiders own the stock at 5.38. just opened at $35. they're selling about 27% of the company. that's a little larger than some of the companies recently. the current trend to sell 10%,
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15% of the company. as you can see here, no problem with that pop, 35.24. there's all the people standing around congratulating themselves and of course the ceo will be over there in just a few moments. back to you. >> we have the ceo. let's welcome kip tindell. thank you for being here and congratulations. >> thank you. glad to be here. what a morning. >> when i read your prospectus, the first thing that jumps out at the top is that you treat your employees, your labor force, your associates better and right. somehow that does translate to better performance? >> absolutely. talent's the whole ball game. i mean, we -- our most important foundation principles is one great employee can do the work of three good employees. so one equals three. it's the most important thing we do. we think we have the best employees in retail. i think that's why we're here today. >> same-store sales really important. renaissance capital says we should not look at the
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deceleration, that their model say 3 to 4% same store growth. >> we're very confident of our 3 to 4 guidance. we think we're in good shape with that. >> excellent. >> a lot of our viewers might not be familiar with you, only 22 states, 60 some-odd stores. what is expansion going to look like, 12, 24 months from now? >> we've indicated we can grow at 10% square footage growth per year minimum. it's great to be inmature in retail. there's a lot of runway left. >> geographic diversity, does it matter to you? do you double down on the states you're already in? >> no. what's amazing is the product sells the same from new york to
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seattle. >> can you find enough qualified employees? i know that sounds like a strange question given many people are looking through a job. you put people through rigorous training and interviews before i hire them. your turnover rate is less than 6%. how do you do that? and is it difficult to find the right people? >> it's, you know, we've been on fortune magazine's hundred best companies to work for in america list for 14 years, number one twice, number two twice. we have the privilege of only hiring 4% of the people that apply. so we're able to really be selective. once people join this company, they never leave. we're single-digit turnover. we train 263 hours of formal training to an industry average of eight. if you invest that much in them, you better not lose them. >> how much equity are you going to distribute as a result of going public? >> that's one of the reasons we
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choose to do an ipo. rebelie we believe in getting as much stock into the hands of employees as possible. we had a really robust directed share program. we're up to 40% of our employees owning stock, which is thrilling to all of us. 40% of the employees own stock and only about 30% are full time and so that include as lot of part-time employees, which is unusual. >> even more than starbucks. >> we're going to put danny in charge of the food. >> people want to know if he caters the meetings. >> and walter robb, renowned. >> bob jordan, who -- herb keller told me bob jordan is the best leader in america so we put him on our board as well.
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we're thrilled with our new expanded board. >> i can't help but notice your pin, 35 years. might get a tight shot of it, maybe not. you co-founded in '78 with $35,000 borrowed. >> yes. >> so the journey from that day to today, what is that like? could you do it again if you had to start today? >> gosh. well, you know, you never expect this but we just -- it really is just a matter of taking care of your employees. if you take care of your employee better than anybody else, they're going to take better care of the customer than anybody else. if those two people are ecstatic, your shareholder is going to be ecstatic, too. that's what we kept in mind the entire 35-year history. i'm embarrassed to say it's 35 years. that must have been my dad, couldn't have been me. >> you've got to be pleased with this. >> it's awesome. >> it's a double.
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kip tindell, a long way from the original range. >> it's the old peter lynch method, they like it here, they'll look it there. >> let's head over to chicago. we'll get the ism from rick santelli. >> all right, here we go. the ism national number is 56.4. now, it isn't as strong as chicago's yesterday, but let's put this in some form of perspective. the 56.2 last look, that was the best level since april of 2011, which means 56.4 is also the best level because it's competing against a 59.4 in april of '11. but it's not a bad number. there's some strength here, just not as much as in chicago. prices paid, moved down from 56.5 to 55.5. employment index moved down from
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55.4 to 53.2. and new orders moved slightly up. we'll call it a wash at 60.5 versus 60.6. so let's summarize. the employment index didn't show strength. a pretty good report. all told as we hover just a whisker under 260, which happens to be the same level actually we closed out the month of september. back to steve liesman. >> rick, we all know everything's better in chicago except for baseball. we both know that. >> chicago pmi was better. >> though i don't think politics is better! >> what it is you do there politically, you do much better than anybody else. >> we train for the national level. we train politics in chicago to go national and to the country, i apologize for that. >> rick, let's talk about this. your take on this is right. this is a strong report. we're talking about a national index here, not just a chicago
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index. and 56.4 is two things. first of all, it's a high level. second of all, it's not the decline and the easing off of the high level from the prior month that economists expected. everybody thought because of the shutdown and all the uncertainty created, it was logical to expect an easing of this number. it hasn't happened. and now a fourth thing that just as i'm thinking this through is that as rick said, the internals are quite strong. new orders up, remaining at a high level, 60.6. production, easing back from 62-60. but still a very high level. 50 is the break even point. so anything above that when you get 10 points above it at 60, that's a good number. employment did ease back. it was a strong number last month. 53. still above the 50 level. still growing. we go through this one by one, the back log also up now above 50 from 49. this echos the chicago pmi, the
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milwaukee and national index suggesting that manufacturing is ahum, kelly. how is that for a word? >> let me just pick up on that. yesterday we had the biggest jump in the chicago pmi for 30 years. are we now present to the ideas that there are up side surprises potentially, that the situation could be changing quite dramatically from what we'd assumed. >> i think two parts to that, simon. one is up side surprise from the down side that people had in their minds when it came to the effects of the shutdown. we had a decent manufacturing employment number last time around and we'll look for that again to see if maybe manufacturing has some employment. the autos are doing okay, boeing is doing okay, big manufacturing companies had done well, simon. i don't know if you want to do it or if i should do it. all that talk is going to
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accelerate the talk about tapering at the federal reserve. >> for sure. >> oh, wait, wait, i'll see you at 10:30. we have jason fuhrman, the president's economic adviser coming up. were you going to do that, carl? >> i cannot wait, we'll see you then. >> phil lebeau has gm numbers out with october sales. hey, phil. >> reporter: interesting numbers from general motors. let's bring in the vp of u.s. sales from the company's headquarters. you were up 15.7% last month above the estimate of a 10% increase. what are you noticing in terms of people coming into the showroom last month and how much of the impact was there from the shutdown of the government. >> phil, there's no question that, you know, the beginning of the month and last month were impacted by what was going on in washington. but honestly, if you look at all the other positives going on, fuel prices down, employment stable, auto, housing doing well, we still see good fundamentals there and we're
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still bullish on the industry and the economy. >> kurt, sales dropped 32%. a lot of people are going to look at this and say what's going on with the volt? >> the volt's still in real good shape, phil. if you look we sold a little over 2,000 units. 99% of that was all retail business. so we're still in a good place. i think we're about 47-day supply nationally. if you look at company where we're doing about 40% of our business, 17-day supply. so we're still very bullish about the volt. >> then why not increase production, if you're bullish about it. i bring this up because tesla sales, many are believing that their deliveries are going to be above expectations and many are saying if there is an inflexion point, you should be seeing better sales about the volt. if you've got to short supply,
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why not increase it? >> inventory is a fine line to walk. we certainly don't want too many. we feel pretty good about where we are and we can ebb and flow production, phil. we feel we're in a good place to take advantage of that business. absolutely. >> one last question, kurt. incentives. there is concern on wall street we're going to start to esee the beginnings of an incentive war bubbling up. they are down year over year for the industry but for you guys they are up. are you worried in a you're going to have to start juicing the deal a little bit in the showroom? >> actually, phil, we've been very disciplined when it comes to incentives. if you look at it from a percent to atp, we're down under 10%. a lot of our competitors are above us and we're going to continue to remain disciplined. with all of the launch products that we have coming, we're excited about it, we're going to remain disciplined and take advantage of those launches. >> kurt mcneil, on a day when gm
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had good news with sales increasing 17.7%. that vote number with sales dropping 32% is going to get a lot of attention, no doubt. back to you. >> gm sales up 2% this morning. turning now to apple. they are rejoicing because the thinnest and lightest ipad goes on sale today. josh, what do you see there? >> here in palo alto at the apple store, the new ipad air on sale today. there's already about 20 people online. you ask them why they want the device, some say it's thinner, lighter. some said they read the reviews and that got them excited. it is thinner and lighter, weighs one pound, ten hours of battery life, running that new
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64-bit a7 chip. the starting price is 499. if you want the deluxe model, the wifi and cellular activity, that's going to run you more like $929. the big question is what is this going to mean for the apple share of the global tablet market? a year ago it was more like 40%. analysts i talk to, one question they have is is this device cool enough and different enough to jump start that tablet market share. >> we've been playing with one version, very light. our thanks to at&t for making it possible for us at least to check it out as it goes on sale and might be hard to find for the next few weeks. >> you think that's going to be a rush? >> supply has been talked about as an issue for the holiday season. >> though i didn't see a huge
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rush behind josh there, not that people are necessarily going to be lining up behind -- >> what time is it? 8 past 7 in the morning. >> we're the die hards, though. you don't think people will camp out for the new ipad air? >> no. >> six. that's apparently the number of people able to sign up for the health care law on its first day. up next, find out what the former health and human services secretary michael levitt think the white house needs to do now to get the affordable care act back on track. free research re, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade.
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the report also saying that cms had not collected 225.6 million in overpayments that it should have collected. now that's the alleged misman e mismanagement on the part of cms. but medicare and medicaid, the programs that cms manages are among of the most widely frauded. since 2007, they've charged more than 1,500 defendants. in april the strike force charged 89 people for $223 million in false billing. so, guys, whether it's incompetence by cms managers or
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fraud against cms, this is an agency that has struggled over the past years. it's one in washington that has a lot of people scratching their heads. obama care is being run by this agency but the question is if you're going to launch a web site, is this the agency you would necessarily choose to go out and do an extremely technical, complicated process that affects the entire country? >> eamon javers in washington, thank you very much. the federal site, the healthcare.gov has been plagued from the start. now it looks like your location could play a major role in how well or how badly the site performs for you. bertha coombs is live in lexington, massachusetts with more on that. good morning. >> reporter: good morning, simon. we're at compuware. they've been doing an independent end user testing and monitoring of how people are accessing the site,
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healthcare.gov. it does seem there are differences. the government says it should all be the same because healthcare.gov is the one portal for some 36 states but there are differences depending where you are. this is a map of what you have saw a couple of weeks ago. and tell us what the red means. obviously not good. >> so what you're seeing here is real and user computers that we're using to test the response time of the site. and all the states that are red are indicating an average of greater than 8 seconds response time, which is considered unacceptable to us in our testing. >> this is realtime this morning. it's certainly gotten a lot better, yet we see big disparities. today, if you were in kansas city, kansas where it's green here, your response time is about four seconds. if you're in kansas city, missouri, it can take you more than 30 seconds. why are you seeing that kind of
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disparity? >> these are real world conditions where these could be on a wireless network, an office network, they'll see different response times depending on what browser they have, if they're on an older browser? >> could the system optimize that? >> sure. independent of these conditions you might get better performance. >> as an end user yourself, there are some things can you do. you have a tip sheet in terms of using the latest browser version. >> sure. also clearing the browser cache, and then perhaps consider what network connection you're using. if you're on a wireless network, sharing that at a local coffee shop might give you low performance. >> you have to optimize just how much band width you're using when you're going into the site. we'll have more later. back to you. >> thank you so much, our bertha
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coombs. >> the administration giving themselves one more month to fix those glitches on health care.com. the question is will that be enough time. joining us this morning is michael leavitt, the former secretary of health and human services. governor, good morning. >> good morning. >> obviously you're used to these roll-outs, having implemented medicare part d. that headline of six enrollments on day one, how does that strike you? >> well, i think the value of it is shocking, shocking headline. the reality is these situations always have glitches. that's a profound one. administration ultimately will be gauged or the history will judge their effort by what's in effect on march the 15th of 2014, not so much what will happen on the first day. i don't say that to minimize the difficulty of the dilemma they
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have. they have some serious trouble here and they've got to solve it or the president's legacy program will clearly be imperilled. >> your experience with part d, 43 million seniors, another massive program that had to reach a lot of people. do you have a longer fuse than most, more patience than most because of your experience? >> the first six weeks or so, the same thing is happening to a lesser degree when we rolled out medicare part d, there were lots of accusations of -- that the web site was not functioning perfectly and they were right. there were problems in trying to get all the medicaid systems to connect up and that was correct. but we fixed it. and when we did, people began to use it. now, i don't know if that's what's going to happen here or not, but i do think it's a fact of history that needs to be acknowledged. what we just saw with -- in the
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previous segment with metrics used to match up hit times, that's a very smart thing that the administration ought to be doing. they ought to be creating metrics to say, look, this doesn't work the way we want it to but we're making progress and here's a metrics you can measure to do that. i think that's a big mistake for them. they need to acknowledge that there are problems but we're fixing them and here's evidence. >> governor, correct me if i'm wrong. overall the success of this whole endeavor is particular to number of amounts. if it transpires that not many people are signing up, in particular iunhealthy people ar signing up, then people's premiums could go up. if you were currently the secretary, would you be happy with the way in which your boss is getting the message out
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there? because i don't see that type of vision across the country that will empower the system and get enough momentum for it actually to deliver mathematically on what it has to do. >> this is an area where i think comparison to part d can be made fruitfully. we started our enrollment cam p -- campaign not to enroll but to educate people in advance. i went to 200 cities. we had bus tours and advertisements. some of this has been driven by the fact they may not have had the budget, i don't know. i do think they have trouble in being able to educate people. they have a lot of challenges. the first one is the technical problem. they have to solve the technical problems or they're never going to get to the numbers. you are right, what really is at stake here isn't whether or not they got their web site fixed. it's whether the pooling process
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that they've developed is going to work. you have to have enough healthy, young people in this pool to make it affordable for. >> else. >> governor, i mean, it appears to be actually worse than that. according to the front page of "the washington post" today, in some states eight out of tn of the people that are signing up are on medicaid. if you continue that sort of ratio, it's simply going to be seen as an expansion of the entitlement program. and a huge divergence between those states that have opted in and now must bare the cost of that and those that don't. it becomes a political mine field, does it not? >> it's an economic mine field. it was created around massive subsidies for low income people. and many, many of those, a big majority of them, will be medicaid recipients.
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it's natural you're going to see people that are, a, receiving large subsidies and, b, those that need health insurance because of their health. they're the first ones that are going to sign up. you've got it right. the equation is there. it's the reason many have been skeptical of the economics of this. like other entitlements that have been passed in decades in history, this is going to be much more expensive than what has been projected. simply for the reasons that you've enumerated. >> iron the glitches out, get the rest up and running. thank you, former governor of utah and former secretary of health and human services. who are the outside investors set to make major bucks when the company debuts right here on the big board? we'll tell when you we come back. (vo) you are a business pro.
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go, company insiders hold more than 25% of twitter. but who outside twitter now controls the largest stake you may ask yourself? julia boorstin is live with more. >> rizvi's will own as much as 15% of its ipo. jpmorgan is a big investor in those funds with a 9% post-ipo stake.
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now, for a man o whose company has such a massive stake in a high-profile ipo, he keeps an incredibly low profilf manageme. chris sacca has been building funds to invest in twitter shares from employees and other investors. twitter gave sacca right of first refusal to buy shares. his series of funds has brought investors. sacca's name is not listed because he signed over rights to
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rizvi, he also owns sesac, flipboard & square. from the very beginning sacca and rizvi agreed to be long-term holders, not selling until at least 100 days after the ipo. >> jason fuhrman coming up. we have lost some points here. ♪
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about an hour in trading, some of the stories we're talking about on the west coast. the ism manufacturing index for october, above expectations, rising slightly to 56.4. chevron is the biggest loser on the dow, falling 2% on a third quarter miss. the oil giant hurt by lower refining margins and a strong debut for the container store. the retailer nearly doubling after pricing its ipo at $18 a share. >> now to obama's top economist this morning. jason furman is the chairman of the economic advisers.
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steve liesman has the lead. >> reporter: there is a lot going on. jason is just the person to talk about it. >> it's great to be here in the studio. >> let's talk about the economy straight off the bat. we just got through the shutdown and the debt ceiling debate but we had some strong economic numbers. if you look at the month of october, you saw claims go up a lot at the beginning of the month. they started to recover but they still haven't recovered to back to where they were at the beginning of the shutdown. we'll see in the jobs number next week, the shutdown will have taken an unnecessary toll economy. >> how much of a toll? >> we estimated that the jobs number would be about 120,000 jobs lower than it otherwise would have been because of the shutdown. >> and is it still your belief after seeing claims come down and the ism this morning, which was very strong? >> the ism was strong. the american economy has a lot of underlying strength and we're
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going to be able to get back to that strength and if we have certainty of not lurching from fiscal crisis to fiscal crisis, we're can have a really strong economy. i'm confident we'll bounce backs. this self-inflicted wound hurt the economy. we don't want that to happen again. i think there are a number of strong factors in the chi, the structural factors, the low rate of growth, health care. energy is a big boom. in the housing sector, a little leveling off as mortgage rates rose. we're still below our total potential. auto sales continue to be strong. there continues to be a lot of
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pent-up demand there. we need to do our job in creating the certainty we need, making the investments in jobs. >> one of the criticisms of the obama administration is it gets in the way of business and growth through regulation and a variety of ways that it ends up hurting growth. how do you respond to that? >> i think that's just completely wrong. if you look at something like energy, administrations, all of the above approach to energy has helped fuel a huge growth in natural gas, a huge growth in oil exploration, but at the same time we're using less oil and we're exporting more and that's good for our economy. you've soeen types of regulator approach that you took before was one of the things that contributed to the financial crisis. you need rules of the road to foster that type of growth, you don't want the u.s. >> talk about the fact that you're here to promote foreign
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direct investment. one of the up sides is important employers in the u.s. tend to be more stable employers, less likely to hire and fire in the middle of a downturn. >> the president is always looking at how to create jobs, some this eveniof it is like im reform and yesterday the conference brought in over a thousand people from all over the world. the message was america is open for business. foreign direct investment in the united states, it's 4% of jobs, those jobs contribute 5% of our output, 16% of our r & d, 20% of our exports. so foreign direct investment really punches above its weight when it comes to the u.s. economy and we'd love more of it and we're trying to attract that investment here. >> it shouldn't be said the president's economic adviser doesn't know the number. one of the things that's been a big black eye for the administration is health care.
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i know that's not strictly speaking your department getting things running. does this really underscore the criticism of the republicans that government's just no good at doing these things and ultimately the private sector is better at doing them? >> first of all, health reform is centered around the private sector. it's centered around marketplaces. those are private insurance companies, they're competing for business, they're trying to attract customers and as the secretary of health and human services said, what happened with healthcare.gov was a debacle and people are fixing it now and they're working 24/7, working around the clock and they're going to fix it. there's more to health reform than just that web site, but i think the government is doing what the private sector would do. >> i mean, it's hard to argue that the private sector would have done as badly as the government did. >> you've seen the private
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sector botch things before. you've seen web sites and new computer games go up that are used by millions of people that can't use them the day after they go up. they do what we do. they bring people in, they bring a lot of resources to bear and get the thing back on its feet. and the product sector doesn't launch things in this type of political environment where a lot of people are rooting for your failure. >> that's all the time we have. jason furman, chairman of the council of economic advisers or, as you said, the president's top economic adviser. >> thanks, steve liesman. let's check in with dominic chu. >> check out shares of spirit aerosystem, a major supplier of components to boeing and airbus, it reports a 10% rise in sales due to strong demand for large commercial aircraft. they expect demand to double to more than $2 trillion over the next 20 years.
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spirit aero also benefiting from reining in those costs. >> usage of facebooks among u.s. teens overall was stable but we did see a decrease in daily users specifically among younger teens. >> well, a 13-year-old penned this op-ed back in august titgtd "i'm 13 and none of my friends use facebook." she'll join us to tell us why facebook is not appealing to her and her friends. >> many yachts are going high tech. we'll show you lights controlled with an ipad, boats in a steer themselves and of course retractable flat screens. we'll tell you about all the latest gadgets on mega yachts,
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busy morning here. container store of course going public, nearly doubling. lost some ground, though, when ism hit. best number in two and a half years but some of the internals not so good, including employment and the production series. maybe it's that, maybe it's that good news is once again bad news. we'll see. but for the time being, dow is up 47 points. let's go to rick santelli and the santelli exchange. hi, rick. >> reporter: we're going to talk technical calls. i know the biggest joke on the trading floor and all the 34 years i've been on this trading floor has been that technicals are interesting and charts work sometimes but at the bottom of the ocean, there's a lot of sunken ships with a lot of chart rooms. i always found that interesting. i have to tell you, there's a lot of repettive, predictable aspects to human nature. there just are. humans tend to behave similarly under similar sixes. i think bubbles and tulips will
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bring to mind some examples. but in nature, many things are very predictable. i do an experiment of viewers, listeners on radio when you go home. hold up a piece of paper and go up to any of your friends and say this is my door, knock on it. what you will find is most people never knock four times, about 90% of the people knock three times. these are comfortable numbers to us as humans. i think to that end technical analysis works in a very good way giving you levels. it's beyond the levels that all the questions rise. i'd like to run something that was said a couple of days ago. let's run that piece. >> the bond market rally down exactly to 247 on the 10-year, a picture perfect kind of resistance point. >> all right. now, that was on halloween. let's run something that i did on the santelli exchange a month and a half ago. can we run that second piece. >> if you take the 38% times each of those ranges, you come up with 46 basis points and 52
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basis points in 10s, subtract that from your high yield, you end up with a yield of 139 for your major 138 on 5s, 247 on 10s. so we showed you how to do it. it pretty easy. that's the 38% retracement. for the five year it was 138. for the 10-year it was 247, right on the nose. these things really aren't hard. the hard part of technicals isn't coming up with the right level, it's how you frame that with regard to time. time is one of the things along with price that most technicians underestimate. if you want to really brush up on it, i advocate you do some research and find some rare books still out there written by the greatest technician of all time, w.g. gann. the yield curve on wednesday, where where the 5-year notes?
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they were at 1.24. how many times have you heard the big bond fund managers saving the darling of the yield curve you want to buy are the 5 years. this is testament that this is correct. but if this is going to be the great bottom i think it could be in yields, what you need to see it all of a sudden we're at 135 in 5s. if you get the 5 year and the 10-year above their retracements, most likely we're going to see a lot more selling. there's a lot of way for the yield curve to steepen. you could have yields go down on 5 and still see steepening, you could see bonds go up on 5 and still see steepening. the 10-year will outrun it in a fairly aggressive way. back to you. >> thank you very much. rick santelli in chicago. >> since ancient greece, yachts have been a symbol of luxury and now they're becoming a symbol of the very latest technology, from
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it seems like something from the movies, a yacht that can be piloted with an ipad and state rooms that are accessed with fingerprints, but this is the real deal. our own robert frank is life at the fort lauderdale international boat show with a look at some of the most technologically advanced yachts out there. robert, good morning to you. >> good morning, carl. you know, you've heard of smart homes. now we have smart yachts. aside from size, the big race in yachting is all about technology. it starts right here on the bridge. as you mentioned, we now have boats that can being piloted with an ipad or piloted themselves with computer navigation systems, advanced detection system where the boat can avoid collisions and wildlife areas. for guests now, it's all about the entertainment systems, the music, the lightings, the blinds are all controlled by ipads and
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smartton smartphones. this one that i'm on now has 16 terabytes. everything is retractable nowadays. you have tables, even retractable glass walls. get this. this is the ultimate retractable. it's a retractable boat. one minute, a sleek boat, then it releases, and it's a party barge. a $1.2 million expandible there. the boys on board, they've also gone really high tech. the latest -- the wheels, because they look great. but i'm told by the captain that this wheel is used best for just putting your feet up. that's about all they use it for these days. guy, back to you. >> wow. that is quite the yacht. robert, what would be the date line on that one, somewhere in
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downtown manhattan, somewhere in the harbor this morning, robert? >> reporter: yeah, exactly. you know, there are over 3,000 boats here today. and just the technology today, this really is the arm's race with yachts today, who has the coolest gadgets. they're spending a lot of money on this stuff. >> they certainly are. robert frank for us this morning with a look at some of the latest and greatest. straight ahead, look at this live shot of the apple store in palo alto, set to open in just a couple of minutes. not a lot of activity, though. we'll get the full report -- >> oh, come on, that's a queue for goodness sakes. that's a queue. what more do you want? >> all right. we'll zoom out. we'll see what's going on, get that for you after the break. plus, we'll dance down memory lane with this man. >> ellen, tell us what's going on. what's happening down here? [ applause ] ♪ ♪ ♪
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>> yeah, well shy of estimates this morning, phil. we'll keep an eye on the shares. also looking at the shares of the container store. they are surging after the ipo and doubling. that's 100%. trading at 36. up 18 bucks. the company only has about 62 stores in 22 states and in washington, d.c. earlier on the show, we spoke to the chairman and ceo, co-founder of the container store. he said he appreciates that fact and sees it as a growth opportunity. take a listen. >> we've indicated that we can grow absolutely at 10 footage growth, and we're looking at double-digit growth from here on. it's great to be immature in retail with 63 stores. there's a lot of runway left. >> wow. so they will join the ranks, carl, of companies that have done quite well in their debut. >> a bit of a segue there, as we look at some pictures of bob pisani, the dean of the big board. you know him well. today, officially marking 20
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years at cnbc. he joins us at post 9 this morning to talk about the past two decades. >> that was one of the original seats at the new york stock exchange. there was seats at the nyse, and back in the '90s, we pulled out history to explain what was going on. i was actually hired in 1990 as the real estate correspondent. david was here. he'll remember it well. and the person who hired me was david. david called me into his office and said, why do i need a real estate correspondent? and i looked at him and i said, because 35% of american households own stock, and 65% own a home! you don't have any coverage for that. he looked at me and he said, that was a good answer. >> you've been here longer than david, then. >> yes. >> i had no idea until this very moment that he actually was not fully staffed -- >> i worked from '90 to '93 full time, but wasn't staffed, because they were trying to keep the head count down. they kept telling me it's too tight. finally, i walked in and freaked out on them. >> you did real estate before you moved down to this floor.
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>> in the middle of '96, i cam down here to sub for maria, who was here for a year, and in '97, came down full time. it's been one amazing run. you know what's wonderful about being down here all these years? you meet all of your heroes, everyone, every rock star, every heads of state, every ceo that you ever wanted to meet. i think my favorite moment was walter cronkite. he spent half an hour with me, because he was my childhood hero. >> of course. >> explaining the moon program and all of the things he wanted to, and advice to me. i think i really appreciated that. >> we were watching you dance with ellen degeneres. that had to be a highlight. >> she came down here when the show was -- sort of in the middle of things. it was very hot. she wanted to do a segment at the nyse, and her producer called me up, and said, ellen likes to dance with people, are you good at dancing? you have your answer. >> there you go. >> and you are mr. new york, bob. when i first came here, you took me on a three-hour tour of the bars in lower manhattan.
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>> well -- >> like walking with a major celebrity. hi, bob. hi, bob, all the way around. >> i'm interested in the bars for historical purposes. the oldest bar in new york is just down on the corner, the bridge cafe. >> indeed. >> got inundated during sandy. >> yeah. >> unfortunately. still hasn't reopened. that's not a focus of my research under any circumstances. we're not that worried about it. >> in a way, you've never stopped covering real estate, right? >> no. >> it's always remained a passion of yours. >> and diana olick did a fantastic job. we didn't have one for many years, and i'm so happy she's covering it and doing a great job. what's more important than the retirement issue, the home you have? and the important thing for cnbc is making sure that the retirement issue is front and center in america. we're going to have a retirement crisis, the baby boomers are not in good shape for retirement, and we need to make that a big focus. >> you should try the generations after that. >> yeah, a tough one, too.
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our generation didn't save much until late in life. most of us didn't start saving money until late 30s and into our 40s. the average 55-year-old has something, like, $60,000 in their 401 k. it's not a good sign. we need to make that a real priority. >> glad they made you staff, bob. >> they did. >> that worked out for you. two things in my life i've heard, shut up or keep talking. that'll be the title of my biography. shut up and keep talking. every once in a while when you're not there, or a guest not there, they'll say keep talking. >> all right. bob, thank you. >> david, with you all these year, always a pleasure. >> for me, as well. >> all right. as we kick off another hour, joining us this morning, here's what you missed earlier on. ♪ >> announcer: welcome to "squawk on the street." here's what's happened so far. >> we've known for a long time how to move interest rates up and down, and the public and markets kind of understand that.
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they don't know much about how to move asset purchases up and down, and we're discovering how difficult that is. >> if they keep providing all of this liquidity, that's great for the stock market. and if they begin to taper, it will be because the economy's doing better, then i get a better "e" on my earnings front. >> this is 1937 without this fed. in november, the fed piled on in '37. this is not that time. bernanke sees what's going on in washington. he knows they're destroying any sort of hope for -- in confidence, so he has to provide it. which one is the 2 and which one is the air? here we go. >> this is the air. >> nice. very nice. it is noticeable. >> close your eyes. doing a shell game. >> all right. i'm in. this is the air. >> that's right. >> there you go. [ bell sounding ] most important foundation in principles is one great employee can do the work of three good employees. so one equals three, it's the most important thing we do. we really think we have the best employees in retail.
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i think that's why we're here today. >> american economy has a lot of underlying strength, and we'll be able to get back to that strength, and if we have some certainty, not lurching from fiscal crisis to fiscal crisis, making the investments in job, we can have a strong economy. ♪ good friday morning. welcome back to "squawk on the street." we're live at post 9, watching the markets on a pretty busy day. container store going public, has nearly doubled. got some i.s.m. numbers pretty strong, but not internally. the dow is off 61 point, the s&p up almost 4 points, and after a torrid month of october. shares of netflix rallying. bear did upgrade the stock, focusing on the company's increase in original content. and another look at tcs, the container store, soaring after it started trading this morning, priced at 18, but obviously now
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trading at 100% gain, $36.10. a lot more on that company later in the hour. can you feel it in the air this morning? apple's ipad air is now officially on sale in stores across the country. we'll look at the demand for the new ipad and what it could mean for apple shares. plus, the obama administration, six is the loneliest number. that's apparently how many people were able to sign up for the obama care exchanges day one. we'll look at what this means for the future of the law. maybe we should listen to teenagers when it comes to facebook. a few months ago, a teen wrote, "i'm 13, and none of my friends use facebook." she'll be here to tell us why facebook isn't cool anymore. the numbers for obama care are not pretty. according to document, only six people -- six -- were able to enroll in obama care on day one. those dismal numbers have people taking a closer look at the organization running the program. that is the centers for medicare and medicaid services. our eamon has more on that
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story. >> reporter: hey, carl. centers for medicaid and medicare services oversee them across the country, and it's an agency that's really dealt with challenges in terms of its own management mistakes, and, also, massive fraud over the years against medicare and medicaid by people all across the country. the agency struggled with both of those things. take a look here at some of the headlines from the inspector general's website over the past couple of months of problems at cms. cms improperly paid millions of dollars for prescription drugs. the inspector general said that allowed about $29 million in drug costs. cms incorrectly paid hospitals for beneficiaries, allowing about $7.7 million in payments. cms is also not collected $225.6 million in overpayments that the inspector general says it should have collected. those are the failures of the agency just within the past year, according to the inspector general. and then, also here, look at this medicare strikeforce. this is a response to the fact
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that medicare and medicaid fraud has gotten so pervasive, the department of justice and hhs formed a task force to deal directly with it. since 2007, that task force has charged more than 1,500 defendants. those defendants collectively have falsely billed the medicare program for more than $5 bill n $5 billion, and in april, the strike force charged 89 people for $223 million in false billing, and in that case, they noted -- court documents allege they bribed beneficiaries for the medicare information that was used to bill for home health services not rendered. i love the detail here in the case. the lead defendant here allegedly spent much of the money from the scheme on luxury vehicles, including two lamborghinis, a ferrari and a bentley. it looks like medicare fraud can pay at least temporarily, carl. >> eamon jabbers in washington. thanks. >> you bet. the new ipad air is
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available in stores across the country. so is demand for the ipad strong on day one? josh lipton live outside an apple store in palo alto with more on that. josh, first we saw pictures that suggested there weren't a lot of people there, and then it looked like a decent crowd was building. what do you see now? >> reporter: yeah, well, here in palo alto, kelly, at the apple store, which just opened the new ipad air going on sale, i can tell you we got here pretty early. it was still dark out. about 20 people on line. i would say now there's around 30, 35. you ask them, what has them excited, they'll talk about the fact the device is thinner, it's lighter. i did also ask them about the price of the device, and some of them said, listen, they use it so much personally and professionally, they weren't really worried about that. let's go over the specs of the device. 9.7-inch display, 10 hours of battery life. weighs around one pound. running the new 64-bit a-7 chip means it can handle more data quickly. the starting price is $499. if you want that deluxe version,
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the wi-fi and cellar connectivity, you want the 128 gigabytes, that's going to run you around $929. the big question, though, really is what this will mean for apple share of the global tablet market. according to idc, in q3, its share was about 30%. in the year-ago period, it was more like 40%. so you have seen a drop there. a couple of important caveats there that apple bulls would point out. one is they hadn't upgraded their ipads in some time. two, apple does have a different strategy here. they're actually making money on these devices, unlike some of the rivals. kelly, that is the question, i know, analysts have, is this device cool enough, is it different enough to jump-start tablet market share for apple? guys, back to you. >> that is a huge question. thank you so much, josh. josh lipton. will the new ipad air be a game changer for apple? we want to brig in ed beg this morning with "usa today," and rob cera, over at evercore. happy friday. good to see you again.
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>> thank you. >> good to see you. >> ed, you say in a sense it's more name change an game change. you say even for apple aficionados, it's not a must-do upgrade. what would it have taken to make it a must-do? >> well, i mean, when you think about it, the recent ipads all run the same apps that this new one does. 475,000. and that's not to be minimized. and, you know, you guys talk about thin and light and fast. again, not to be minimized. but there's not any real new features here. i mean, i wanted to see the fingerprint scanner that they put on the new iphone, for example. that's not there. i would have loved to have seen time limits on parental controls. i have a wish list of features, but having said that, it is a trsk ipad for people looking to either get into the market for the first time, or to, you know, upgrade, say, the original ipad. if you have a recent ipad, it's not going to do anything that your recent ipad doesn't already do. >> yeah. rob, a lot of other tech writers sort of echo what ed is saying. is that enough to move units in
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the quarter? >> i think it could drive actually a pretty big upgrade cycle. obviously, the software has a lot to do with it, and you can run the software in the new one and the old one. what's different is the ipad air is a lot thin, a lot lighter and slimmed down to look like the mini. it's the first ipad in five generations that looks different, and i actually think that different look could be the thing that gets people to upgrade for the first time in a while. >> yeah, rob, how important are aesthetics here relative to just the price point? i mean, apple consumers have shown less sensitivity, we should say, to prices, precisely because it's aimed at the higher end of the market. can that still be the case today when their total tablet share has dropped below 30%? >> i think apple continues to go after the higher end of the market, there's no doubt about that. all of the market share loss has been in the really low-end, where they don't even address it. i think that what the aesthetics mean is, when you're talking about a high-end product, it does matter.
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nothing makes people want to upgrade like feeling their existing ipad now looks dated. and i think that's actually the hope. that's what drive an upgrade cycle. >> ed, talk to me about the incremental improvements, and i emphasize the word incremental, but on the battery life, the processing speed, they're doing things they couldn't do in 2010. >> yeah, with the processor, the a-7 chip you have talked about, it's robust, faster. battery life, they've held their own with it. ten hours they claim. i did a harsher test, didn't quite get up to that. the battery life is there. so no question there are improvements inside this device. but i agree, aesthetics matter a lot, and really just usability. a pound. you feel the difference between 1.4 pound on the prior generation, down to a pound here. it makes a big difference. >> we tried to demo that on set, and a blind test, you know which one is the air in your hand. >> no question. >> would you argue that if there is a gap between an android
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tablet and an ipad, did that get narrower or wider as the air came out? >> i think it's probably around the same. apple has the huge advantage, in my opinion, in usability. they're usier to use, and 475,000 apps, especially produced for the ipad. on the android side, you have apps that really are phone apps, that have kind of been stretched to use on the display, not quite the same experience. >> interesting. well, we'll see what the consumer response is this weekend, and certainly the market response over the next few weeks. ed, rob, have a great weekend. thanks, guys. >> thank you very much. >> you, too. teenagers just aren't liking facebook anymore. a few months ago a 13-year-old penned an op ed saying "i'm 13 and none of my friends use facebook." you know what, the latest earnings report ended up proving her right. she's coming over to post 9, and when we come back, she'll tell us why facebook isn't cool with teens anymore, and maybe tell us what is. first, rick santelli, also
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keeping an eye on the floor for us. rick? >> absolutely. both of them. we're going to have peter bookfar, a frequent guest. i'm going to hit him with the conventional wisdom, how collateral is coming in short supply, high-quality collateral. and talking about qe in a way i have never heard anybody speak of, and how there might be irony in the fact that it's used to keep interest rates down. you won't want to miss this one, bottom of the hour. it raises the price of fishmeal, cattle feed and beef. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy. invested in the world. bny mellon.
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the dow is now up only 24 points, lost a fair amount of ground here. looking at utilities, one of the biggest gainers today. dominic chu tracking that. >> that's right, carl. it's not the sexiest of sectors, but we have the decent move in utilities this morning. shares of nextera energy are the headline of the sector, that's after america's biggest generator of renewable energy reported earnings and sales that beat wall street estimates. it was helped by florida power & light unit, which saw revenues rise by 8%. other stocks on the move in the sector including public service, peg, and pg&e up around a percent, and so is american electric, but certainly, nextera energy is the headliner today. >> yeah, especially with rates moving up. thank you very much, sir. remember this op ed on
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"mashable"? a 13-year-old noticed that facebook was losing teens, long before the report. welcome. >> thank you. >> you may be the youngest guest on set. this is late in your journalistic career. you've written quite a bit. what was it about facebook in particular that has failed to catch on with you and your friends? >> honestly, it's been a website for so long, and now, so many new apps and new things are coming in. and teens are just seeing new trends and facebook is kind of just getting old for multiple reasons. >> in a typical day, what kind of social media, to use that phrase, do you use? >> instagram, snapchat, vine, twitter, tumblr, like, everything. >> but not facebook? >> facebook if i'm bored. if none of my friends are
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posting on facebook, there's no point in going. >> was there a point you were on it and you left? or was it never cool from your experience? >> i don't know about other people's experiences, but just for mine, none of my friends have posted much on it, maybe once or twice, so that's when i'll check it. i'll check it if i'm bored and i have nothing else to do. >> of the other ones you mentioned, we hear a lot of migration to instagram among teens. is that number one now? >> yeah. >> or second to something else? >> instagram is definitely the top thing we're on right now, just because it's really simple and new and trending, and none of our parents know how to use it. >> i was going to ask about the parent factor. so what happens if, you know, all of the parents start to get on instagram? do you think it will lose some of the appeal? >> well, instagram, you can put yourself on private, so you can tell your mom you can't follow me, and she will have no way of seeing your posts. >> is your mom -- is your mom
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standing right there by the way? >> yeah. >> just making sure. what about twiter? i don't know if you know this, twitter is going public here next week. so it's getting a lot of attention from a lot of people who trade stocks. is it too complicated to use the way some people say? >> no, i love twitter. a lot of my friends have twitter. twitter is really easy to figure out. it's like you make a tweet, you can mention people, you can hashtag. >> is there a point at which you see too many ads, you stop watching, or do you actually click on some ads, or even buy something from an ad you clicked on? >> i never buy anything on ads. most of the time, if i see an ad on youtube, i'll skip it if i can. i don't like ads. i think i just want to see the video or the tweet. >> you know, what about television? is it about what you guys are watching? is it about using a netflix that -- how does that factor in day to day to how much you do? >> to be honest, tv has lost kind of my attention at points. like, i still go on to watch
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certain shows, but most of the time, if i am watching tv, it will probably be on netflix, or i'll probably be on a social network online. >> yes. it's amazing the world you're growing up in versus the one -- i can't believe i just said that out loud. [ laughter ] finally, has facebook reached out to you? have they tried to win your heart -- have they commented on your blog, anything like that? >> i don't really think facebook particularly likes me. they have not reached out to me. but i'm sure they may be taking some advice. >> fair to say, nothing they could say would make you more more active on that site? >> i mean, it's honestly -- it's not their fault. it's kind of just everyone who posts some stuff -- it's parents, it's the ads, it's just everything. >> yeah. >> all right. ruby will be back for your views on twitter valuation, maybe tesla as well going forward. >> it's one thing to talk about it, one thing to hear a teenager actually say it out loud. >> yes. >> ruby, thank you very much.
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>> thank you. >> ruby carr. the most lucrative horseracing event of the year starts today, but it's not in kentucky. you have to go to santa anita, california, for this one. our jane wells is there and she joins us with more. hey, jane. >> oh, and who wouldn't want to be here this morn, carl? on average, $160 million is bet on the breeders cup. $60 million more than the super bowl. but outside of racing, why does anyone care? that's something they're trying to change. plus, meet a killer horse with a sweet instinct. at farmers, we make you smarter about insurance.
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that's the value of trusted connections. that's u.s. trust. ♪ ♪ i'm back in the saddle again hello, bob pisani on the floor of the new york stock exchange. a lot of excitement in ipo land here today on the floor. at 9:30, the container store opened, priced at $18, opened
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100% high, opened at $35. look, rock solid. boy, a beautiful chart. all throughout the day at $35. and everybody was happy, the ceo was down here, 100 employees. insiders own this stock at an average price of $4.93. not $5.38, i misspeak earlier. now, they were bought oh, several years ago, 2007, as i recall, by leonard green. important thing about the company is 63 stores, but they're planning a big expansion. now, the ceo kip tendle indicated to us he has a lot of plans to keep expanding aggressively. >> we've indicated that we can grow absolutely at 10% square footage growth per year minimum, and we spent much of our history doing that. so we're looking at double-digit growth from here on. it's great to be immature in retail with only 63 stores. there's a lot of runway left. >> yeah, and this has happened before. that sounds ambitious, 63 to
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100, it won't happen soon. if you look at 5 below, they went public a little more than a year ago. the stock has been well. they've been expanding. a teen retailer. the big one, of course, in this space, expanding aggressively, restoration hardware. they went public. the price was $24. it was a year ago. the one-year anniversary. look, $68 right now. so a lot of room for growth in some of the retail stores right now. meantime, in terms of the stock market, the thing to watch today is not necessarily stocks, it's interest rates, because we're slowly creeping up on the ten-year. remember when stock traders start talking about interest rates, pay attention. so we were two, four, eight back on wednesday, before the fed meeting. and now we've been moving up throughout the day, here we are crossing 2.6%. guys, when you get the interest rates moving up, that's a real problem for the stock market. that's the big topic today. >> yeah. >> we have the ism number. >> yes. >> it started to move. >> the 10-year yields went up. >> thank you, bob. bob pisani, celebrating 20 years today.
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the most profitable horse racing event of the year, the breeders cup starts today in santa anita, california. many people don't pay attention to horse racing in the fall, but the breeders cup is hoping a whopping $5 million prize will change that. our jane wells is live in santa anita with more on that. hi, jane. >> reporter: hey, carl, the $5 million prize for the classic is more than three times what orb got for the kentucky derby, yet the television ratings are five times what the cup gets. that's a branding dilemma, which they're spending seven figures to try to change. first, meet the favorite. >> here he is. this is probably the nicest, sweetest horse you'll ever -- i've had -- competes at this level. he's actually owned -- part owned by joe torre. >> reporter: trainer bob bedford hopes game on dude can go all the way. that's an hermez halter he's
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wearing. he calls it the olympics, paying out a total of $27 million. >> and the fields are just extraordinary. i mean, the horses that are running, i mean, you'll never see this group of horses of this caliber running together on one day. this is your last opportunity to really run for some serious money, you know? when you start talking $5 million, you know, 2 million, 3 million, not only that, if you win one of those races, if you have a stallion or a mare, a philly, you made that horse worth 8 or $10 million. >> reporter: the cup is going with hollywood vibe with kate upton, hired a new marketing director from football. that guy started $1 million fantasy race contest online to draw in a new type of fan. >> i've been to races and i see how casual fans get excited about the color, get excited about the numbers, get excited about the names of the horses, because i had a golden retriever, so i'll bet anything,
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golden cents. it's interesting. they get into it, but they don't know why. which is the other side, very sophisticated, gambling, handicapping side of the business. and i think there's a casual fan that's wanting to be involved, but they really haven't been given the right opportunity, the right offering. >> reporter: now, is it going to work? that is the big gamble. most of the races are going to be aired on the nbc sports network. but the cup classic tomorrow night will air in prime-time on nbc. guys, the breeders cup is paying the trucks costs and sharing in the ad revenue with the network. back to you. >> wow. fascinating. jane wells in california this morning. jane, thanks very much. you probably heard of bonobos, the second largest men's e-tailor in the country. it's expanding now into women's fashion. the ceo is here to tell us why he is betting on the ladies when "squawk on the street" returns. . . but your erectile dysfunction - that could be a question of blood flow.
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edmunds.com is out with a report showing tesla is outselling the market in some of america's wealthiest cities. according to the report, the tesla model s is the must-have toy this year in eight of america's wealthiest zip codes. jessica caldwell is a senior analyst with edmunds, and she joins us to talk more about that. good morning, jessica. >> good morning. >> pretty stunning statistics here. in eight of the 25 wealthiest, all eight are in california. what does that mean?
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>> well, i think the car is inevitably popular in california. i think silicon valley, it has a lot of attention. it's kind of the hometown hero of the car. it's definitely the must-have for all those, you know, tech folks that, you know, over the past decade have built up an enormous amount of wealth. >> yes. and there's a certain mindset, you might argue, that leads them to a tesla. what are they outselling, and which ones are they outselling the most? >> well, i mean, i think if you look at the zip codes, you know, they're the number one car, in many of them. they're outselling cars you would think would do traditionally well in wealthy areas, like mercedes-benz sedan, or a land rover, or even a porsche. i think a lot of people were surprised it was outselling a lot of the cars. the data is for this year. tesla hasn't been around for a long time. you can't measure out everything in those zip codes that's owned. but i think if you look at the start that the company's had with the model s, it is showing
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that it's very promising. >> jessica, do you think there's room for tesla to grow in these markets in terms of saturation? the company is pivoting to be more mass market over the next couple of years, but they're certainly on to something in the zip codes if they were to just continue to build out there. >> i think so. i mean, this is definitely, you know, going to hit a ceiling, because these zip codes don't account for a ton of volume. i think that moving to an suv, which is something that they have planned, will do well, because that's always a good accompaniment to an expensive sedan. and then, also, a mass market. this car -- this company doesn't necessarily want to be a niche player. i think any car company wants to get to the point where they're making more of a mass vehicle. and i think that it is starting with a lot of the influential buyers, really speaks well to the company's future when they tend -- when they go more mass market. you know, of course, e.v.s have their challenges with plug-ins, but it's still a few years out. >> yeah, you go out to
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california, you know you're going to find a charger at apple headquarters. you're going to find it at the grocery store. not such -- not so much an east coast phenomenon. i wonder if that is putting a lid on their growth? maybe they would have hit more counties or outsold in more counties had chargers, or were chargers more consistent in other parts of the country. >> yeah, that's definitely the case. and i think that's definitely a key to their growth moving forward. when they get to that mass market car, there has to be better charging infrastructure and more areas of the country. they're not going to get people buying this car if there's nowhere to charge it. and that's something certainly they have on their priority list. but i think that is, you know, a definite barrier they'll have to overcome to be truly more mass market. >> interesting on twitter, people are saying they're showing up in toronto, asking if their own zip code is included on the list. jessica, thank you so much for your time. interesting, as we love to talk tesla, jessica caldwell with edmunds.com. and now, let's get to rick santelli in chicago with a look at bond markets and fed
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programs. rick? >> absolutely. is there anything else, kelly? peter bookvar, thank you for taking the time today. welcome. >> thank you. >> all right. you know, i have lots of conversations with fixed income traders and investors, managers, fund managers, and the other night i happened to spend time with jeff gund laulach, and wha said jived with some of the fears of the big boys. and one of the fears is a collateral shortage. with the fed ownership of where it is with treasuries, and countries like china, debating whether they will continue to buying, and they go into quarantine, treasuries in quarantine. the end game is at some point, if something happened -- let's say we had a 1,000-point break in the dow jones -- but what their fear is that instead of yields going up, which most people think is the new trend, that there could be one more big rally due to unforeseen circumstances. your thoughts on that?
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>> i think that's a definite possibility. i mean, we know high-quality collateral, aka treasuries, are an important lubricant in the plumbing of the financial system. as you said, the fed taking on so much onto their balance sheet at the same time that the u.s. budget deficit is smaller, therefore, issuing less debt relative to what they were, can create a situation that you mentioned. and there is a consequence to what the fed is doing. in their econometric models, the effect is on inflation, outputs. what is not is unintended consequences. that's one of the situations we are going to see, i'm more confident of it. there is a flip side to what the fed is doing. there is no free lunch. and whether it's a big fall in the stock market at some point, a big spike in interest rates, then followed by a drop in interest rates because of what you said, are all possibilities, because we've hit such extremes in their policies, therefore, there is going to be possibly an
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extreme flip side. >> now, under the capital "i" for irony, let's look at something from a different tangent. if i look at the idea that the fed was afraid to taper because of the 100-plus basis point move when they just mentioned it, that tapering will be difficult. but i look at the world, i look at europe, i still see toxic assets out there. i see bad loans in china, infrastructure bubbles. you know, maybe if they would have just let the taper happen and the compression would have popped, maybe interest rates ironically would be lower than they are now, due to some of those factors after the initial adjustment normalization. your thoughts. >> well, we did see, to your point, a drop in interest rates after qe 1 and qe 2 ended. because people were worried about the economic consequences of them not printing. the downturn then caused the drop in interest rates. this time around, though, one of the big buyers of u.s. treasurys outside of the fed have been
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foreigners. foreigners are net sellers of u.s. treasurys year-to-date. that is an important crutch. that is no longer there. so this time could be a little different in the market's response to it. also, inflation expectations, while seeing benign cpi-epi readings, expectations in the five-year tips, they're still elevated. >> i'm out of time. we'll have to cut it short there. i like all of the answers, and, of course, we'll continue to monitor the fed and interest rates. guys in new york, back to you. >> all right, thank you so much, peter and rick. let's get to dominic chu, for a quick "market flash." >> you got it, carl. how about shares of sony, drifted down to session low, off nearly 3% after yesterday's steeper losses. remember, the electronics giant cut the outlook for the year, and today, analysts at jeffries cut the rating on the company to a hold, and credit agency rating moody's has put it on a hold for
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a potential downgrade because of the slower progress of the profitability plan. back over to you. >> that's a tough story to watch. thank you. all good things must come to an end, and that includes earnings season. it's with a heavy heart that we get ready for the third quarter's final installment of the earnings squad. before we go, let's rern the people who made this earnings quarter so special. ♪ kiss today good-bye and point me toward tomorrow ♪ ♪ we did what we had to do once again, can't regret what i ♪ ♪ did for love ♪ happen in a second. with fidelity's guaranteed one-second trade execution,
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because with power ports... and wi-fi... and in-seat entertainment, for everyone on board, now when you fly, time flies too. (flight attendant) sir, we're about to land. (vo) we're adding a brand new plane, with all this, every week. it's just one way we're building the new american. coming up on "halftime report," lots of bubble time, and now we hear from lazlo on where he thinks stocks are and where they're going from here. what about the sectors that have soared? biotechs, auto, solar, no sector goes unturned. we're watching the froth, and playing the action, as well. should microsoft split up? someone very close to the company is urging a spinoff. we'll find out if it's a good move for your investment. that and much more coming up on "the half" from post 9.
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welcome to the "earnings squad" where we dissect the earnings stories that everybody is trading, and joining me is dominic chu and stephanie link. we have to start off with the fluor, and it's a great read on the economy, and their commentary about metals and mining. >> certainly. this stock has been all over the place, all over a market, when they reported last night, it fell $3. if you look at the revenue, it missed. new orders, missed. earnings came in better than expected but tax related. on the conference call, the company talked about the pipeline and how strong the oil and gas pipeline business was. that is a higher margin business. that's what the stock trades off of, and it took off. the company raised guidance, they'll do more in terms of buybacks and this is on the heels of another company, chicago bridge & iron, also good numbers. i think this space, the enc space, is the place to be for
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2014. >> how big is their exposure to metals and mining? they mentioned the suspension of the mine and how that illustrates the headwinds they're facing and the whole industry of the metal and mining industry. >> it's a concern but not a surprise. it's the reason why the stock doesn't trade at the typical premium multiple that it gets relative to the group. as you get to betters havibility on that front, and again, oil and gas, much more important for the margins story. that's what people are paying attention to. >> right. on madison square garden, topping analysts expectations, and, dom, doing some homework here. >> three major segments. you have sports, media, you have entertainment. on the sports side, you know them for the blue shirt, the rangers, hockey team, the knicks. on the entertainment, the radio city music hall, and msg network and the fuse network. entertainment underperformed, so that was a bit of a drag. but sports and the media side did well. with msg, the story is whether
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or not this company can sustain some of the healthy stock gains despite the fact they had less revenues from some of the entertainment units they have. >> there's some real questions from the investor base as to what the company is doing with its cash. they just embarked on a j.v., and it was seen that that would delay them returning capital and being able to make acquisitions as needed. >> they're going thank you huge capital deployment, right? they're trying to rebuild out the new madison square garden, everything else. the question it becomes for an investor, do you believe in the story that this will be a bigger, better deal? this is the way to spend the money. i think, you know, with sports teams like that, you have to make the venues big. >> the company has great pricing power. you can't say that about a lot of its competitors. that's very important for the cash flows. >> linsanity last year. >> you can't forget that. >> the maker of arm & hammer reporting an increase in net sales. an interesting quarter. fourth quarter guidance light, but they came out and backed 2013, and they don't typically give guidance for 2014 until february.
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that's the norm. what's to make of the stock? they had strong growth at the most recent acquisition, and that's the gummy vitamin business, apparently very high growth. analysts bullish on the stock cite that as a great source of revenues. also, they specifically cited arm & hammer and trojan, a new line of lubricants, new line of concentrated detergents. the question is, do they are have power when tide produces the lower-priced detergents? >> and that's the million-dollar question. if you look at p&g, compare the organic growth of the two, p&g had 4%, and they had 1.6%, so you can see where it's starting to hit. >> yeah. that does it for "earnings squad." we'll be back with "street signs" with the three best earnings stories. coming up next on "squawk on the street," one of the men's largest e-tailors is going after a different kind of consumer. clients are always learning more to make their money do more.
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♪ 'cause every girl is crazy about a sharp-dressed man sneds. welcome back, the next guest has been on a mission to fix baggy pants for men, but today, they're joining us to announce the launch of a new brand, air, the all men's e-tailor will have an all-women's e-tailor under its belt, as it will be the first line of women's apparel from bonobos. andy dunn is the founder and ceo
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here at post 9. welcome. >> thanks for having me. it's great to be back. >> it's been a fascinating story for the retail space. you launched online, and now several locations in the real world, so to speak. now it sounds like the women's brand, division, whatever you want to call it, will follow suit. >> we built air with the idea that we're actually solving a different problem in women's than we are in men's. the machine's brand was built around fit, fun, service. air, as we got to know, the founding merchant, and cameron, about solving for the well-travelled woman. she's busy, she wants quality essentials, she wants a bonobos-like shopping experience but a brand her own. it's a acronym, ayr, for all year round. it's an antidote to fast fashion, amazing essential pieces, great fit, and highly edited assortment, and a great shopping assortment that you've come to known on the men's side. >> that's something, an e-tailor would emphasize fit.
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because one reason people go to stores is to try the then on and see if it fits. >> we're starting with ayr in denim. you can go on to ayr.com, and we'll soon release a thousand units. and the idea is it's an amazing fabrication, it has a 30% stretch. the denim's fantastic in terms of the softness and how it works. but we'll be able to offer more sizing and assortment just like we did with the website, because we're direct-to-consumer only. our hope and our belief is that if we can build trust with this female customer in bottoms, we've seen on the men's side that that is an unbelievable way to build customer loyalty. if you can earn her trust there, that will earn us the right to do woven shirts and sweaters when we fully launch in february of next year. >> you brought on management from the likes of j. crew. you were involved with warby parker. are you going after the aesthetic that j. crew has done so well? >> it's different. we think they're a phenomenal
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brand. and our inclination isn't to go head to head. our belief is there's something missing in the market where, you know, you want to get the perfect t-shirt, the perfect jean, the perfect woven shirt, you don't want to jump in and spend designer prices on everything, because we think our woman is too smart for that. but you actually want something that will last, you know, quite a bit longer in terms of being an essential piece in your wardrobe. moreover, on the bonobos side is we've seen tremendous potential from being digital only at the core in terms of how you build, and then figuring out the offline for now. so for us, we have eight of the e-commerce showrooms -- austin, texas, bethesda, maryland, chicago, d.c., two in new york. and it's a new way to build a brand with digital at the core. >> we want to ask about the numbers. in fact, you guys are, i believe, the second biggest e-tailor, which is a u.k. company? >> not the second biggest e-tailor.
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there's an ipo with zhu littly. and think we have the next to build the next great stand-alone company rkt and we envision a family of brands instead of just one. we'll find out how we do with ayr. >> can't wait, andy. watching you is always fun, especially going into the season. please come back, give us a progress report. >> yeah, thanks for having me. >> perfect. andy, thank you so much. andy dunn, ceo and founder of bonobos. in the meantime, an update on google's mysterious barge in san francisco. after all of the speculation, the purpose of the barge has reportedly been revealed. the local cbs affiliate says the barge will be used for -- parties. it will feature luxury showrooms and a party deck for the company to market google glass and other gadgets to vips. the report says the project has been in the planning stages for more than a year and is being personally directed by google co-founder sarah gaye brynn. so how about that, kel?
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>> we thought it might be servers cooled by the ocean waters, no. >> but all sorts of questions about whether they were trying to avoid onshore taxes. party disbe expensive. who knows? >> let's hope we get invited to a couple. >> yeah. coming up, the new york city marathon is back, but not without major changes. find out how the city is preparing for this iconic event. the ceo of the new york roadrunners joins us live after a break. ct management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro.
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one of new york's most iconic events returns on sunday, and it's a comeback of epic proportions. new york's i.n.g. marathon returns, a year after being cancelled from hurricane sandy, of course, in the wake of the horrific bombings that took place in boston. our mary thompson is live in central park with mary whitenburg, the ceo of the new york roadrunners. hey, mary. >> reporter: hey there, carl. thank you so much. as you mentioned, we're hear with mary whitenburg, and two topics of conversation, a lot of people want to touch on, the comeback after the cancellation and security. you're spending $1 million more in the wake of the boston bombings. what can runners expect to be different and what can spectators to be different? >> it will be a race full of meaning. we'll be thinking about all of those affected by sandy last year, and our heart with those affected by boston.
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so we're just so committed to having an amazing day for new york, for boston, for the u.s., and for running. and security will be at an all-time high. and i think you'll see more presence of security and police. but the idea really is to be supportive of what is such a celebratory day. >> runners can't wear camel backs and big costumes? >> right. runners have been prepared sometime now. nothing over the shoulder and nothing over the face. >> let's talk about last year. you were criticized for trying to put on the race so soon after sandy, and then cancelling it two days before. did you lose any sponsorship because of this? >> we didn't. you know, it was an unprecedented time. if we could only go back and have that all happen early in the week and make sure it was so clear to everyone, we're here to support the city. what we do is we just continue on in supporting new york, supporting running, and all of our partners are back and strong, and everybody is just really looking forward to continuing to support the mission. >> is the sponsorship up or down this year? >> sponsorship is up. i don't know if you know, we're
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already looking forward to -- we'll celebrate i.n.g. this year, and we structured premier partnership for next year, for the next eight years. it's stronger than ever. >> you said you're ending a decade-long relationship with i.n.g. as a primary sponsor. an indian company will become the primary sponsor. what can we see differently visually or financially? >> financially, additional support to our programs year round. our youth programs, grassroots programs. visually, it will be a very big change. you won't see as much orange, and it's a chance to rethink the entire presentation of the event. so we're excited, and i think you'll keep feeling the great community and neighborhood essence of this event. >> just tell me, when you look at revenues from the race, how much of it is sponsorship, how much of it is admission fees? >> about half is the admission fees. what we're trying to do is grow sponsorship and grow
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philanthropy in donor dollars, so we can make running as accessible to as many people as we can. >> how is -- tell us about the state of running. is it still a growth sport? >> running is booming. it is. you know, the beauty -- this is all about, for us, helping and inspiring people through running. we want to help people live healthier and fitter lives, and running is so effective. that's what it's about. more and more people are about. marathon day is our running day, and it gets everyone excited. it's not about 26.2 miles for those watching. it's get up the next day, and we'll support you one mile, two miles, getting moving again. >> who are your picks for the men and women -- >> i'm not allowed to have picks. it will be a great race. >> noethank you so much for joig us. we're been speaking with mary wittenberg. back to you. >> all right. mary, thank you so much. a lot of people excited for that, carl. and a lot of people excited about the fact that, at least, the market opened on the first day of the month. it's off, on the strong i.s.m.,
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so important to watch. >> only twice this year has the first trading day of the month been negative. april and may. and, of course, we got -- we started the year with a bang. we'll see what the afternoon brings us. for the time being, barely hanging onto the green line. >> exactly v a great weekend. >> you, too. let's head to post 9 and wapner, the boys and "the half." >> thank you so much. the berini bull case, he is live here with his call on where stocks are heading next. >>. >> coffee talk. off a big run this year, can starbucks power even higher or are shares already overcaffeinated? our traders are going to battle it out. we do begin with the great debate over where the market is and where it might go over the final stretch of 2013, and what a year it has been going into today, the dow is up 19%. the s&p nearly 24%. the nasdaq 30%. but it is those